mproving the product development process 353 programme complexity-the size of the programme and the interrelationships between projects; commercial constraints on the programme company pressures on the programme In recent years there has been an increasing interest in developing methods for evaluating product development. For example, the assessment tool and methodology(ATM) of Barclay et al(2001) measures the complexities and newness of a product and relates them to the PD integrating activities and process Clark and Wheelwright(1993)developed a method for auditing the individual project. Cooper and Kleinschmidt(1995)developed a tool aimed at identifying the firm's critical success factors in product development. It had two sets of measures for the product development programme: programme profitability and programme impact on the company. They separated companies using these measures into high-impact technical winners with highest product success rate and sales from new products, but not so high profitability dogs with poorest performance on all measures · solid perfo st profitability and second highest product success rate, lower sales from new products than high-impact technical low-impact performers with mediocre product success rates and low impact of new products on company sales There have been the general industry comparisons described in Chapter 1, for example Griffin(1997), which have useful measures and results to compare with your companys results This comparison of the company's product development effectiveness and efficiency with those of other companies or of the industry in general is known as'benchmarking. Benchmarking the companys current practices against the latest findings in the literature and through comparison with other companies is an essential part of overall product development management. The application of best practices to our specific situations and the on-going measurement of erformance ensure a basis for continuous improvement. 8.2.1 What is benchmarking? enchmarking is a process of continuous evaluation to achieve a competitive advantage. It measures a company's products, services and practices against those of its best competitors or other acknowledged leaders in their fields. It can be a specific area such as the benchmarking of the new product concept against the competing products(Rudolph, 2000), the company's technology against the most technically advanced company, the companys innovation strategy against technology predictions But mostly there are multiple measures in benchmarking Benchmarking can be at different stages of the product development project for the overall product development project and the product development
• programme complexity – the size of the programme and the interrelationships between projects; • commercial constraints on the programme; • company pressures on the programme. In recent years there has been an increasing interest in developing methods for evaluating product development. For example, the assessment tool and methodology (ATM) of Barclay et al. (2001) measures the complexities and newness of a product and relates them to the PD integrating activities and process. Clark and Wheelwright (1993) developed a method for auditing the individual project. Cooper and Kleinschmidt (1995) developed a tool aimed at identifying the firm’s critical success factors in product development. It had two sets of measures for the product development programme: programme profitability and programme impact on the company. They separated companies using these measures into: • high-impact technical winners with highest product success rate and % sales from new products, but not so high profitability • dogs with poorest performance on all measures • solid performers with highest profitability and second highest product success rate, lower % sales from new products than high-impact technical winners • low-impact performers with mediocre product success rates and low impact of new products on company sales. There have been the general industry comparisons described in Chapter 1, for example Griffin (1997), which have useful measures and results to compare with your company’s results. This comparison of the company’s product development effectiveness and efficiency with those of other companies or of the industry in general is known as ‘benchmarking’. Benchmarking the company’s current practices against the latest findings in the literature and through comparison with other companies is an essential part of overall product development management. The application of best practices to our specific situations and the on-going measurement of performance ensure a basis for continuous improvement. 8.2.1 What is benchmarking? Benchmarking is a process of continuous evaluation to achieve a competitive advantage. It measures a company’s products, services and practices against those of its best competitors or other acknowledged leaders in their fields. It can be a specific area such as the benchmarking of the new product concept against the competing products (Rudolph, 2000), the company’s technology against the most technically advanced company, the company’s innovation strategy against technology predictions. But mostly there are multiple measures in benchmarking. Benchmarking can be at different stages of the product development project, for the overall product development project and the product development Improving the product development process 353
354 Food product development programme. There can be short-term and long-term benchmarking; for the short term, Hultink and Robben(1995) identified product-level measures such as speed-to-market, launched on time, development cost; in the long term customer acceptance (met revenue goals, market share goals and unit sales goals, percentage of sales by new products)and financial performance(attaining goals for profitability, margins, return on investment). Four factors were equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines and product performance level. Finally benchmarking must be related to possible improvements; there is no point in extensive benchmarking in areas where the company or personnel cannot make improvements because of lack of people, knowledge and assets. Benchmarking and continuous improvement need to be linked. Zairi's(1998)comment is worth remembering when benchmarking the impact of its application is more for changing attitudes and behaviours and raising commitment through better education, awareness Ind inspiration from model companies. Benchmarking is perhaps the best means for servicing the human asset by continuously supplying new ideas to sustain superior performance levels Over recent years benchmarking has become a fashionable tool for many organisations. Like many such tools, one has to question the rigour and objectivity with which many benchmarking exercises are carried out and,in turn, the value that is captured from these exercises. Benchmarking is not a tool (the many methods suggested for benchmarking are tools), but it is a method of increasing knowledge and skills of all people involved in product development from the top management to the junior team member, so that product development is more effective and efficient 8.2.2 Basic steps for benchmarking product development There are some basic steps in benchmarking, shown in Fig. 8.2, which need to be followed to maximise the return on any investment in benchmarking(Zairi 1998: Czarnecki, 1999; Barclay et al, 2001) Clearly define the benchmarking objectives Before beginning a benchmarking study, the organisation should be clear on what the subject is to be; what are the desired outcomes; who will use the results, and how will the results be used to benefit the organisation in the future. It is all too easy to embark on wide-ranging data collection, which, in the end, provides very little useful information for the organisation and its specific requirements Determine the sources of benchmarking data The benchmarking can be internal and using internal data sources, but usually the comparison is with companies within the specific industry or in industry in eneral. Sources include the following
programme. There can be short-term and long-term benchmarking; for the short term, Hultink and Robben (1995) identified product-level measures such as speed-to-market, launched on time, development cost; in the long term, customer acceptance (met revenue goals, market share goals and unit sales goals, percentage of sales by new products) and financial performance (attaining goals for profitability, margins, return on investment). Four factors were equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines and product performance level. Finally benchmarking must be related to possible improvements; there is no point in extensive benchmarking in areas where the company or personnel cannot make improvements because of lack of people, knowledge and assets. Benchmarking and continuous improvement need to be linked. Zairi’s (1998) comment is worth remembering when benchmarking the impact of its application is more for changing attitudes and behaviours and raising commitment through better education, awareness and inspiration from model companies. Benchmarking is perhaps the best means for servicing the human asset by continuously supplying new ideas to sustain superior performance levels. Over recent years benchmarking has become a fashionable tool for many organisations. Like many such tools, one has to question the rigour and objectivity with which many benchmarking exercises are carried out and, in turn, the value that is captured from these exercises. Benchmarking is not a tool (the many methods suggested for benchmarking are tools), but it is a method of increasing knowledge and skills of all people involved in product development from the top management to the junior team member, so that product development is more effective and efficient. 8.2.2 Basic steps for benchmarking product development There are some basic steps in benchmarking, shown in Fig. 8.2, which need to be followed to maximise the return on any investment in benchmarking (Zairi, 1998; Czarnecki, 1999; Barclay et al., 2001). Clearly define the benchmarking objectives Before beginning a benchmarking study, the organisation should be clear on what the subject is to be; what are the desired outcomes; who will use the results; and how will the results be used to benefit the organisation in the future. It is all too easy to embark on wide-ranging data collection, which, in the end, provides very little useful information for the organisation and its specific requirements. Determine the sources of benchmarking data The benchmarking can be internal and using internal data sources, but usually the comparison is with companies within the specific industry or in industry in general. Sources include the following: 354 Food product development
Improving the product development process 355 Clearly define Benchmarking objectives dentify Companies and individuals that can act as execute Data collection Analyse and impleme Fig 8.2 Basic steps in benchmarking Published materials. Case studies, industry surveys and research into R&D methodology and practie primary data. These materials can also be used to prepare a list of potential benchmarking part Databases. For example those prepared by the Industrial Research Institute (IRD)in the USA, provide an excellent source of information on level of spending on R&D, number of r&D employees, number of patents granted etc. Regular summaries of these data are presented in the Journal of research Technology Management
• Published materials. Case studies, industry surveys and research into R&D management methodology and practices provide an excellent source of primary data. These materials can also be used to prepare a list of potential benchmarking partners. • Databases. For example those prepared by the Industrial Research Institute (IRI) in the USA, provide an excellent source of information on level of spending on R&D, number of R&D employees, number of patents granted, etc. Regular summaries of these data are presented in the Journal of Research – Technology Management. Fig. 8.2 Basic steps in benchmarking. Improving the product development process 355